Residual Values of A320 Family Could Be Buoyed by Life Extension

An extension to the service lives of the A320 has the potential to improve residual values in the long term. With the A320 having been in service for two decades, examples are clocking up a considerable number of hours, testing the original design goals. The original design goal of the A320 was for 48,000...

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An extension to the service lives of the A320 has the potential to improve residual values in the long term.

With the A320 having been in service for two decades, examples are clocking up a considerable number of hours, testing the original design goals. The original design goal of the A320 was for 48,000 cycles and/or 60,000 hours. A320 fleet leaders have already exceeded 60,000 hours with 40,000 cycles also surpassed. There has been a need to see an increase in the design life and Airbus are working towards a massive tripling such that aircraft could potentially fly for 180,000 hours or 90,000 cycles whichever is reach first. Based on a utilization of 3,500 hours per annum, the 180,000 hours would equate to 50 years. Aircraft values are currently based on an economic life of 25-30 years though 20-25 years is seen as more prudent. The tripling of the design goals should allow values to achieve a higher level. However, the design life of the DC9 was extended but the type became economically obsolete such that values reached scrapped levels at approximately 30 years. Because of its wide interior and lower hold capacity, the A320 is already the subject of a freighter conversion program. The extension to the service lives will mean that the majority of A320s will be eligible for conversion and still be able to offer sufficient further service to warrant the investment in the conversion.

With another 10 years before the arrival of a replacement, the A320 will have been in service for 30 years and a reasonable proportion will have reached the original design goals. In view of the length of the time that will be needed to effect the replacement of the fleet, an extension to design goals is essential.

An intermediate service goal has already been established to allow continued operation of the fleet leaders. In 2007, the limits were extended to 37,500 cycles and 80,000 hours. The rationale for the increase stems from longer than expected sector lengths. At the original 48,000 cycles/60,000 hours this equated to around a stage length of 1.25 hours. In actual operation this has increased to nearer two hours. Within just over two years Airbus hopes to increase the goals to 60,000 cycles/120,000 hours eventually rising to 90,000 cycles/180,000 hours by 2012. The ability to meet these new goals will require new fatigue tests to be performed. Long term residual values are still being largely dictated by the arrival of replacement products.